Is this the end of Capita in Barnet - Grant Thornton's report is a devastating critique of Capita's dismal performance

Background:

Late last year a massive fraud was discovered at Barnet Council. One individual managed to steal over £2 million in 62 separate transactions. I’ll say that again; 62 separate acts of theft, some of which were six figure sums, which took place between July 2016 and December 2017. The individual made requests for payment on fictitious Compulsory Purchase Orders (CPOs). 

Did Barnet’s systems pick up these multiple acts of theft? No, it was actually discovered by the individual’s bank who queried a transaction and contacted the Council on 18^th December last year. The individual worked for the Capita joint venture, Re, and the transactions were processed by the outsourced finance department, CSG, also run by Capita.

Having identified very quickly that this was a fraud, Barnet commissioned Grant Thornton to undertake a major review to identify how such a large scale fraud had been able to take place. This project, called Project Rose, was given a budget of “up to” £500,000 and has been on-going ever since. By the end of June the bill was already £225,654. 26 and it looks like significant work has taken place since then. I was made aware of the fraud back in February but nothing was mentioned publicly until April when a major fraud investigation was mentioned at the Audit Committee, although no details were given. The individual who committed the fraud was eventually sent for trial and pleaded guilty on 31 July 2018. He was sentenced to 5 years in prison.

The Report:

On 17^th July members of the Audit Committee were given a draft copy of the Grant Thornton Report in private session. It appears that this was a much briefer version of the report and annexes which have now been released and which you can read here. At the time I asked why the public were not allowed to see this report and was told that the reason was:

“Council officers/the report author determined that Appendix 1 (the Grant Thornton report) should be exempt. Capita has made a request for more time to respond on the accuracy of this document and this was considered”.

The report version we have now is “7th Draft” so it looks like there have been long and protracted discussions between Capita, Barnet and Grant Thornton as to what the public finally get to see. I did wonder whether the version we would get to see would be watered down. It may well be, but the version we have received paints a vivid picture of a failure of epic proportions. In total, the report and annexes run to 138 pages. What is interesting is that not only does the report look at how the fraud was able to take place, but it goes much further in examining the contractual obligations of Capita to deliver financial controls and where those obligations have failed. This suggests that the pressure is being ramped up on Capita to hand back parts of the contract.

The Findings:

So let’s look at some of the key findings.

The Five Pillars of Control 
Grant Thornton have set out five themes for financial control and then detail how Capita have failed on each one. 

Some of this stuff is a bit technical but some of it is just common sense, for example:

“There was a lack of clarity about both the role of the budget holder and the allocation of budget holder responsibility between Re, CSG Finance and the Council, in respect of regeneration projects and related financial management activity”. This is something I have been raising with the council since the start of the contract. It is a subject that has cropped up in a number of internal audit reports back as far as 2014.

“We noted as part of our review, that due to the lack of a formal scheme of financial authorisation, the CSG Finance Treasury Team could not check that the officer requesting a CHAPS payment for a CPO was an appropriate person to do so. There was a check by CSG Finance Treasury Team against the approval levels for the recorded on Integra,(Capita’s own IT system) but this was not an adequate check in the absence of a formal scheme on which Integra authorisations should have been based”. This is such a basic error that it is shocking when you see it in such a large organisation.

“During the period of the fraud, there were no CHAPS (a faster version of BACS for same day bank transfers) procedures or task checklists in place for those working in CSG Finance Treasury to guide them through the CHAPS approval process. This resulted in the officers loading bank details onto Bankline and authorising and releasing payments who were unclear on their checking and verification responsibilities”.  Just remember we are talking large sums of money here, typically tens of thousands, with the largest being £124,750. It is beyond belief that there were no written procedures or checklists for checking and verifying who  was authorised to request such large sums of money.

“We found that schedules of expected property acquisitions did appear to be held by Regeneration Managers, in some form although this tended to be on non- standardised spreadsheets. Finance officers we interviewed in CSG Finance Treasury and the Business Partner team were not aware of the existence or potential application of these schedules, which could help them monitor the value and timings of large payments, including through the CHAPS process. We would expect lists such as these to be to be used to cross check spending on regeneration cost centres as part of the budget monitoring process”. So they didn’t even check against a list of properties to be acquired to make sure which payment related to that property. That a basic error and not one you expect of a FTSE250 outsourcing company.

“Where payments were processed via CHAPS there has been no direct verification with the supplier/vender (e.g. by telephone) to confirm the bank details are correct. The payee’s bank details were not checked against independent information. This control alone would have prevented the fraud”. Again, a simple common sense check that simply was not undertaken.

"In the cases of reporting to both Growth and Regeneration Oversights Board (GROB) and the Performance and Contract Management Committee, the information is relatively high level and therefore significant onus is placed on CSG finance business partners to challenge the narrative on budget variances provided by budget holders, for the cost centres they are responsible for."  I have attended most of the Performance & Contract Management committees and  there is seldom any real challenge from councillors. Part of the problem is that they are given so much high level information and in ever changing formats that even if the information was available I am not sure they would spot it.

In the absence of this detailed understanding of Re transactions, CSG finance business partners will be unable to effectively challenge the narrative provided by the regeneration manager, weakening the review control that could identify error or fraud. As CSG Finance act on behalf of the Council in this capacity, this in turn exposes the Council to significant risk”. So we have appointed people to act on the Council's behalf and in the residents' best interest but one part of Capita under the CSG contract has failed to challenge another part of Capita under the Re joint venture. These types of conflict were predicted at the outset, now they have come true.

“The current Business Director for Regeneration, with overall responsibility for regeneration projects, had only nine months experience of regeneration and was not directly involved in reviewing the financial management activity of his managers or the Individual, in regard to regeneration budgets and related ledger codes. In its current form this  role is geared more towards commercial account management, focusing on the contractual relationship with the Council and not with detailed functional and technical oversight of the projects themselves”. So we are paying for a skilled team of experts and what we got were inexperienced sales people.

Lack of Oversight:

The report is damning about the attitude of CSG and Re management when it says:
“A number of officers in CSG Finance and Re commented during our meetings that they were aware of control weaknesses (for example, through Internal Audit findings or their own observations) or recognised in hindsight that control weaknesses should have been identified and addressed. This report describes several situations where a higher level of professional scepticism and rigour on the part of senior managers within Re and CSG Finance, could be reasonably expected to have identified and challenged unusual and potentially suspicious transactions – notwithstanding weaknesses in formal controls and CSG Finance when approving journals, payments and system access, and when reviewing budgetary performance. Some of this may be attributable to the turnover of personnel in key roles and the lack of effective knowledge transfer”. This is what I call, “Don’t give a s**t syndrome” something that is not uncommon when people have no direct link with the organisation they are managing. Creating a culture where staff are both engaged and empowered to act when they see problems is what we should aspire to and something that can be delivered.

The report also pins blame on the council itself:

"In our view, there has also been insufficiently close scrutiny and client side management on the part of the Council and the Chief Officers coupled with an over reliance on the limited scope and frequency of work carried out by the Internal Audit service, to highlight issues. This is likely to have contributed to the lack of focus on effective controls". What I want to know is where were Capita’s Internal Audit and Anti Fraud teams as they also have responsibility for these contracts? I have been raising questions on these types of concerns for years at both the Performance & Contract Management Committee and Audit Committee meetings. Consistently my questions and concerns have been ignored, patronised or dismissed by a council that was in denial about any failings of the precious outsourcing contracts. We now know the truth and it is all bad.

How did we arrive at this mess:

To my mind outsourcing the finance function (and most of the others services) was always a reckless decision based on false assumptions. Back in March 2011 when the business case for outsourcing was being considered I specifically asked why Barnet were outsourcing the finance function and they said;

“It is entirely appropriate that the Finance and Revenues & Benefits functions are included in the cluster of services to be outsourced, as this is the option that it is believed will best deliver the desired outcomes for these services. It is true to say that they are already relatively high performing and relatively low cost, however there is potential for improvement to make these services higher performing and lower cost than they already are, and the options appraisal recommends that outsourcing these services is the option that will best enable this desired outcome to be delivered”.

Seven years on and these are definitely not the desired outcomes. I and other bloggers and activists have been highlighting the risks with this contract from day one and the entirely inadequate business case built on assumptions and aspirations that have proved nothing more than exactly that.

In April 2012 I flagged up the financial control risks in the speech I gave to Audit committee which I republished in November 2012 and which can be read here.   Based on the Grant Thornton report it looks like my concerns were entirely justified.  

I have no confidence in senior Councillors who have exhibited hubris and contempt over the years and, as such I think it is time for a complete review of the committee system and the people who chair those committees. We need people who are prepared to challenge officers, to query facts to scrutinise properly, not people who are seeking favour and a special responsibility allowance. We also need to look closely at the Council’s senior management team to see if they are up to the job (Interim Finance Director excepted). We need strong leadership from people who can command respect and engender commitment, something which I  do not see that at present.

The Council are currently reviewing which of the Capita and Re services should be brought back in house. What worries me is that this report has only addressed two functions  - the Finance and Regeneration departments, one in the Re contract and one in the CSG contract. Are the issues identified by Grant Thornton a symptom of a much wider problems across all the functions of the CSG and Re contracts (and for that matter the Cambridge Education contract)? I reckon they probably are. 

Outsourcing has been tried and in Barnet it has failed. We have inadequate services, a culture of denial and procrastination. It is time to draw a veil over this experiment in political ideology and start building a new council structure that will deliver the services we need with the massive budget cuts we still face.

Barnet - An Organisation In Denial

This sums up my feelings after last night's Financial Performance and Contracts Committee.


I had asked 34 questions and fellow blogger Roger Tichborne had asked another three yet most of  the answers were crafted to tell us nothing about what we had asked. Mrs Angry and Mr Mustard were also there to document the goings on but I think all four bloggers found the meeting entirely unsatisfactory.

Residents need to be aware of what a financial mess Barnet Council are in but the use of words in the reports discussed last night would have created a different perspective. Overspends were "reduced" not by cutting the amount spent but by topping up from reserves. In total last year we used £21 million from reserves to balance the budget, something which clearly isn't sustainable.

One of the serious problems occurred in the Capita run joint venture Re. Last year the external auditor identified a problem with £4.6 million of guaranteed income from Re that had not been paid. At that Audit meeting the S151 Officer who is the head of finance reassured everyone that the money would be recoverable. I had my doubts when the Capita partnership manager called the amount "disputed". I asked again about this money and whether it was going to be recovered at the performance and contract management committee  on 27 February just 4 weeks before year end. The reply from the council then was “The benefit to the council of additional income under the RE contract is guaranteed and does not, therefore, impact on RE’s budget performance” Four weeks later at year end and following legal advice they decided that it wasn't recoverable and it was written off. I don't doubt that writing it off is the right thing to do but what makes me so cross is that for nine months the council was in denial that it was a problem. We were also told that another £2.6 million of contractual liability had to be paid to Re and that it been "omitted from the forecast in error" but corrected before year end. Well technically that may be true but it wasn't corrected 4 weeks before year end. This tells me two things. One: take everything Barnet says with a massive pinch of salt and Two: we have a contract with Re which seems unenforceable and is costing Barnet a fortune. Set out below shows the impact of these late amendments on the accounts.

On gainshare, the nice little earner for Capita, we were promised back in January that this would be dealt with by this committee. Six months on and it is now being passed around a number of committees like a toxic pass the parcel. In my previous blog I gave one example of the sleight of hand which is the gainshare process. However the argument from Barnet Tories has always been that we may pay Capita for gainshare but we are saving money. I have always disputed this and last night I asked a question as to whether the savings were real. The wording of the response tells you everything you need to know about this process which assesses "contractually compliant savings". What that means is that who ever wrote the contract made it very easy for Capita to claim gainshare whether or not they provided any added value to the procurement process. I have a very serious example of where Capita have claimed a gainshare which I suspect most people will find morally wrong but because the contract allowed it Capita have claimed it and Barnet have paid it.

On the rest of the CSG contract Capita are failing on a number of key performance indicators (KPIs) but it doesn't matter because it doesn't count as a contract fail. 

If I was Richard Cornelius I would be taking legal advice as to whether we had grounds to sue the lawyers who acted for Barnet when this contract was being drafted because it is so heavily weighted in Capita's favour. I did suggest back in 2013 that Barnet should get a third party lawyer to review the contracts but as always that was dismissed. It may be a decision Barnet are now regretting.

At the end of last night's meeting I felt that I had just wasted 2 hours of my life. A meeting of complacency, and casual indifference with few questions from Tory members. Mr Mustard's tweet summed it up:

I didn't get any feeling of urgency about dealing with the massive annual overspend.

— Mr Mustard (@_MrMustard) July 2, 2018

Set out below is the speech I gave, sadly falling on deaf ears.

"Narrative too positive – needs to reflect true picture"

"Doesn’t highlight use of reserves. With this the £4 million overspend changes to an underlying variation of £8.5 million"

"CSG narrative not full picture  been told the true picture is much higher overspend"

"Family services net variance wrong"

"Satisfaction with website artificially inflated especially planning"

"Figures don’t match those published by NHS digital"

"Problems with payments Council owed £2 million"

Not my words but those of the Strategic Commission Board on 6 February discussing papers coming to this committee. I asked Richard Cornelius if he was aware of these issues before the year end – he said no he wasn’t but that they should have been reported.

You as a committee can only scrutinise what you are given and if you aren’t given a clear picture you can’t make the right decisions. I do not think you got a clear picture then and I am worried you aren’t getting a clear picture now. I’ve submitted 34 questions yet many of the answers show an organisation in denial, scared to be honest. We are in a financial mess and you all need to be honest as to how it is going to be addressed.

Back in February I asked you a specific question about the Re guaranteed income and you said “The benefit to the council of additional income under the RE contract is guaranteed and does not, therefore, impact on RE’s budget performance. Performance against the guarantee will be reconciled and published as part of the annual accounts process”. Yet now we find that was wrong.

In January former Audit Committee Chair Hugh Rayner said they were referring Gainshare to this committee. I asked about this in February and you said "Both referrals to PCM committee from Audit Committee (on benefits realisation and gainshare) will be formally noted at this PCM committee, and then scheduled into the forward plan. Now you are saying that it has been pushed to Policy and Resources and will be brought to the appropriate committee in due course". This smacks of pass the parcel.

I have not one ounce of confidence in this committee and will not do so until you start answering straight questions with straight answers. Get a grip, stop spinning and start sorting out this mess.

Your Choice Barnet - Driving low paid staff into poverty.

I received notice today that there has been a strike ballot by Your Choice Barnet care staff. Your Choice Barnet (YCB) is part of the Barnet Group, a 100% owned trading arm of Barnet Council. The Council decided it would be a good idea to outsource adult social care. As a result they handed responsibility for the service over to the Barnet Homes who already run the Council's social housing. We were told how the new company was going to save council tax payers a fortune by getting lots of other authorities and other social care providers. Surprise surprise it didn't happen and now YCB are in a financial mess having had to borrow £1 million to get then through the cash shortfall when the new business didn't materialise. Rather than stand back and see that this was a flawed strategy they decided to cut wages, not of the most senior staff but of the front line care staff whose numbers have already been cut. So more work and a 9.5% pay cut has led to a strike ballot. many people are anti union claiming they are unrepresentative. Well in this case the strike ballot was 100% in favour of strike action something which is exceptionally rare and which indicate the depth of feeling amongst staff.

We all know someone who is elderly; a relative, a friend, a neighbour. We expect them to receive decent care from staff who are trained and are consistent. Unsurprisingly the pay cut and more hours has led to a number of staff leaving, replaced by agency staff who may only do the job for a few weeks before they move on elsewhere. This is a desperate situation and entirely of the Council's making. Some services cannot be privatised as they are both uneconomic to a profit driven organisation and critical to the welfare of vulnerable individuals. Driving low paid staff into poverty is not the solution

Barnet Council need to do the right thing and quickly. They need to bring the service back in house and run it properly, treating staff fairly and ensuring the vulnerable get a consistently good quality service. That is the only way this situation will be resolved satisfactorily.

IBM throw in the towel at Southwest One - Are you watching Barnet

IBM who were the major shareholder of the Council outsourcing group Southwest One have sold their outsourcing business to the American Synnex Corporation. I am indebited to Conservative MP Ian Liddell-Grainger for alerting me to the demise of Southwest One on his blog.

Southwest One has been a problem from the start Not only has it run up liabilities of £45 million but is has only delivered a small fraction of the intended savings. As always it there is lots of talk about future/forecast savings but actual savings delivered are small.

The latest accounts show that the company is only remaining solvent because of IBM's support.

 So now that IBM's shareholding has been sold to Synnex, what will happen to the on-going business? Mr Liddell-Grainger reproduces an email sent to staff this week which says:

"We are currently working through exactly what this might mean for Southwest One.  As soon as we are in a position to give you any more information about this situation, and any impact it may have on Southwest One, we will update you as soon as we can."

So the poor staff are left in limbo but what about the services they are supposed to be delivering? Synnexx will use their wholly own subsidiary Concentrix to run the business and let's hope for everyone's sake they can sort out this mess.

 What really worries me is Barnet have entered a similar style joint venture contract with Capita for the DRS contract. Could we in Barnet be exposed to the same sorts of risks that have befallen Southwest One? We don't know because we aren't allowed to see the contract or any of the legal advice Barnet have been given. We just have to hope and prey that Capita make a better job of running things than IBM did at Southwest One.

Capita Week - Today's Spotlight on Birmingham

Today's spotlight is on Capita's role at Birmingham City Council. Service Birmingham is a joint venture partnership between Capita and Birmingham City Council.  It provides information and communications technology (ICT) services and manage the council's revenue service and contact centre, as well as a number of other large and small scale IT enabled solutions to Birmingham City Council as part of the joint partnership agreement.

Between July and October 2012 a specialist consultancy organisation, Best Practice Group PLC, undertook a review of the Service Birmingham and  they published their findings in a report which you can download here.

The key findings were as follows:

• SB Board governance needs strengthening; there was no independent chair or members on the board which is definitely not best practice. Worryingly, I suspect there will be similar governance issues for Barnet. There is only one councillor on the proposed Board overseeing the NSCSO contract and as far as I am aware no residents. Governance is an issue on which Barnet does not have a glowing track record, it is secretive and it does its best to shut out the views of residents.
• Value for money/performance could be enhance; due to the secrecy in the One Barnet contract and the lack of a public sector comparator we will never know whether the NSCSO contract with Capita will represent true value for money.
  
• Partnership working has improved but challenges remain; partnership working is always difficult where the two partners have such differing objectives. Barnet want services to be of a good standard and Capita want to deliver a high return on investment for their shareholders. Such conflicting objectives will always make for a tense relationship and that inevitably leads to a sub optimal solution.
  
• Intelligent client function (ICF) team has more to offer; in Barnet we will have a thin client function and the risk is that it simply will not be sufficient to drive the contractor to innovate and enhance the service beyond what is specified in the contract. That could lead to ten years of inertia in terms of service improvements.
  
• Innovation in the partnership needs reinvigorating; the problem with a ten year contract is that once the initial honeymoon period is over there is no incentive to keep innovating. If Barnet had chosen a five year contract there would be a greater incentive on Capita to keep innovating but with a long contract and a 5 year extension option, there is no real incentive for Capita.
• Management of value in projects is not being maximised; in Birmingham, Capita had a duty to validate the value of both existing and on-going projects. If Capita do not have a financial incentive to do so why should they invest resources? In Barnet we are not clear in Capita have a similar role because we are not allowed to see the contract but I suspect that if there is no financial incentive for Capita to do anything outside the specification they won't.
  
• Flexibility required for pass-through charging; basically SB get a fee when managing a contract even if BCC had all the expertise and set up the deal. This is always an issue in contracts where there is adherence to the letter of the contract rather than the spirit of the contract. I suspect that the naivety of Barnet will lead to similar situations arising.
  
• Concerns over SAP project work being off-shored; although SAP has been implemented in Barnet there may be a risk at some time in the future that some of the data entry work may be off-shored. We have had some reassurances that call centres will not be off-shored but I do not recall the same assurance about data entry, software development, IT management etc. All I do know is that when contract costs come under pressure, Capita have a habit of off-shoring the work. Only time will tell.

The report also highlights some other serious issues. For example, it found that there was a significant reduction in the number of IT Support Staff. The reports states:

"There were 82 staff members leaving SB in the period, with only 32 joining. SOCITM (the professional society of Public Sector ICT Management) refer to this as ‘Staff Turmoil’. SOCITM define “turmoil” in this case as covering all the activity that is associated with the management of staff when they leave or join the organisation. Familiar activity can include exit interviews; advertisement; recruitment interviews internally and externally; consequential promotions; redistribution of workload and further interviews.
SOCITM caution “At low levels this turmoil can be helpful in bringing in fresh ideas, new experience and different skills to the organisation, but at higher levels (>10%) it becomes a drain on management resources and reduces overall productivity owing to the loss of information and experience, recruitment overhead and familiarisation of the new members of staff”. Without appropriate context from SB, such information can create uncertainty within the staff ranks."

In terms of procurement of IT the report states:

With the exception of desktop computers and based on the evidence provided to us at the time of writing this report, our analysis of the SOCITM benchmarking report indicates that SB could do much better with regards to the procurement of standard infrastructure (including laptops).
Based on the examples provided and the evidence from the SOCITM benchmarking survey, it is our view that generally, SB’s procurement capability is adequate when it comes to bulk purchase of standardised items. There is a lack of evidence to demonstrate that specialist project related purchases that fall into the £25,000 to £100,000 band (small to mid-range systems) are generating appropriate value.

Given that Capita will be responsible for Barnet Council's procurement function, I found this statement deeply worrying.

In terms of Key Performance Indicators (KPIs) upon which the contractor's performance is judged, the report states:

Having briefly reviewed the KPIs against several months of performance data it is evidenced that, despite the odd ‘glitch’, on the whole these KPIs are being met and exceeded by SB. Given the concerns from BCC about maximising value, this would indicate that these KPIs are in need of urgent review in order to replace those not now appropriate. The opportunity should also be taken to increase the standards of those which are still relevant and are being reliably reached and exceeded.

My experience is that KPIs can be a blunt tool and that meeting them does not always mean that the contractor is delivering the best service. We are not privy to the detail of the KPIs set by Barnet but I suspect that we will run into exactly these problems in the NSCSO contract.

If you have a spare 30 minutes the report is well worth a read. My big concern is, did any of our councillors read this report? Did they go and talk to anyone from Birmingham in depth about the contract performance and if so what lessons did they learn. Sadly, the impression I get is that Councillors have been spoon fed with information from the external consultants and senior officers who all have a massive incentive to get this contract implemented.

More Bad News at Southwest One - Perhaps Barnet Should Take Note

Southwest One, a joint venture between Somerset County Council, Taunton Deane Borough Council, Avon and Somerset Police and IBM appears to be in yet more trouble.

In a speech given by Ken Maddock, Leader of Somerset County Council this week to the full council he roundly condemned the failings of Southwest One:

"As an administration we inherited a partnership that promised a huge amount, but it was not delivering. Southwest One’s accounts year on year show losses, staggering losses just published of £31million, and failures to hit modest savings targets. We have bent over backwards to try to make this partnership work, but we have to state clearly that our primary duty in looking after the public’s hard earned money is to make sure we get the best possible deals, that we get the best possible value for the public’s money. I have to say that Southwest One is failing this test.

We are currently looking at all our services and all our contracts to see whether we are doing the best we can for our customers, whether we are providing the best possible services for our customers and at the best possible prices for our customers. I have to say that Southwest One is failing this test.

We need a council that can cope with future government cuts and rising demand. We will need to be efficient and flexible. I have to say that Southwest One is failing this test.

Sadly, Southwest One is failing. It is failing to deliver promised savings; failing to cope with a changing financial landscape; failing to be flexible enough to adapt in challenging times and provide the best possible value for money. To make up for this failure, we will now accelerate our extensive review of everything that the council does.

Almost half our most vital services are carried out by private sector or not for profit organisations – we will look to increase this where appropriate. We will encourage social enterprises, partnerships, communities and voluntary groups to get more involved in what we do and what we run. We will look to put the customer at the heart of what we do. And we will do this whilst we continue to do all we can to make Southwest One work. But I have to be clear; it is failing; it is inflexible; and it is intransigent. We are therefore looking at all the options available to us.

I do have one final message for Southwest One – and that is to the staff and our Somerset County Council colleagues and secondees working there. The message is this - this continuing failure is not about you; it is about the contract, the complications, the failed technology, the missed opportunities, the lack of promised savings. It is about Southwest One itself, not about the people working for it."

Now this is coming from the CONSERVATIVE Leader of the Council.

Most sensible people would check to see is mass outsourcing is a good idea by talking to other people before signing up for a £1 billion contract. If I were Cllr Richard Cornelius I would be on the phone to Ken Maddock on Monday morning to double check if all the advice being fed by the numerous consultants advisors and senior officers is realistic or just plain b***s***. Experience at Somerset would suggest the latter is the case.